Final Results
08 Avril 2003 - 9:00AM
UK Regulatory
RNS Number:7500J
Auxinet PLC
08 April 2003
Auxinet PLC
FINAL RESULTS
Year ended 31 December 2002
Highlights
* 2002 Operating Loss reduced to #391,000 (2001: #4.195m) before goodwill
amortisation
* Profitable since September 2002
* Cash generative since September 2002
* Forecasting sustainable profitability and cash generation in 2003
* Recommending changing name to DataCash Group plc at AGM
* Seeking permission to buy back up to 10% of shares
David Bailey, Chairman of Auxinet plc, said:
"The Board's stated objective of underlying sustainable, profitable, cash
generative growth has been realised since September 2002.
In 2003 we expect to capitalise on our strengths, our world class technology,
experienced staff and impressive client base...........we will do it with the
additional confidence of sustainable profitability and growing cash balances.
The Board will recommend changing the name of the Group to DataCash Group plc...
and will seek authority to buy back up to 10% of the issued ordinary share
capital".
For further information contact:
David Bailey (Chairman): 0870 7274760
Keith Butcher (Finance Director): 0870 7274760
CHAIRMAN'S STATEMENT
2002 was the first full year where the Group was solely focused on our payments
system, DataCash, now the only active trading company within the Group.
DataCash's turnover grew by 30% from #2.07m to #2.70m. In September 2002 the
company reached the significant milestone of becoming both profitable and cash
generative. Group losses, before goodwill amortisation, were significantly
reduced to #391,000 (2001: #4.87m). The second half produced a loss of #114,000.
Our revenue derives from a combination of annual licensing fees and monthly
transaction fees. The transaction fees rise as the volume of transactions grows.
In the last year the number of transactions processed grew strongly to 18
million. Since DataCash's inception in September 1997 there has been growth in
both transactions and revenues in every quarter (adjusting for one-off
receipts). The underlying business model provides the framework for the Board to
have confidence that this trend will continue. The Board's stated objective of
underlying sustainable, profitable, cash generative growth has been realised
since September 2002.
We reduced our overheads significantly from 2001 levels and our costs for the
current year are expected to remain at around the same levels as in 2002. Both
the organisation and systems have the capacity to support further significant
growth in transactions, which is expected to result in increased profits.
The Group has no borrowings. Cash balances fell from #951,000 to #667,000 in the
year. Importantly, cash balances grew from September 2002 and we expect to be
significantly cash generative in 2003.
In 2002 we invested in systems and in extending our product range. As previously
reported, we have increased the capacity of the system to a theoretical 100
million transactions per month, approximately 50 times current volumes. During
the year we introduced a number of new products and are pleased that we met our
customers' needs for the support of new and additional payment methods.
Our customer base is changing, moving away from new Internet companies towards
more established high volume customers. We are pleased that a number of
international customers have selected DataCash as their payment solution
provider in the UK, reflecting our leadership in this market.
We are seeing large customers, who hitherto had their own in-house systems, now
moving to outsource this service due to the growing complexities and cost of
providing and supporting, a payments service. This is providing opportunities to
move from purely e-commerce "Card Holder Not Present" (CNP) transactions to
physical, "Card Holder Present" (CHP), point of sale transactions. This CHP
market is estimated to be 30-40 times larger than the CNP market. It is a
different market, but one we believe will contribute to our growth in the
future.
It is encouraging that our staff have all been with us for a considerable time,
providing a stable base from which to grow. I would like to take this
opportunity to thank them for their loyalty and commitment through 2002.
In 2003 we expect to be able to capitalise further on our strengths; our world
class technology, experienced staff and impressive client base. This year we
will do it with the additional confidence of sustainable profitability and
growing cash balances. We look forward to reporting on progress.
At the 2003 Annual General Meeting the Board will recommend changing the name of
the Group to DataCash Group plc. The name "Auxinet" was an umbrella name under
which to trade both the payments and the recruitment businesses. As we are now
purely involved in payment processing it seems sensible to change the Group name
to reflect that. We also intend to seek authority to potentially buy back up to
10% of the Company's issued ordinary share capital.
David Bailey
Chairman
Auxinet plc
Consolidated Profit and Loss Account
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
#000 #000
Turnover
Continuing operations 2,703 2,073
Discontinued operations - 971
Total Turnover 2,703 3,044
Administrative expenses
Amortisation of Goodwill (1,975) (1,975)
National insurance on share option credit - 157
Severance payments - (112)
Other operating expenses (3,113) (7,714)
------------ ------------
Total administrative expenses (5,088) (9,644)
------------ ------------
Operating loss
Continuing operations (2,385) (6,170)
Discontinued operations - (430)
------------ ------------
Total operating loss (2,385) (6,600)
Interest receivable and similar income 19 65
Amounts written off investments - (310)
Interest payable and similar charges - (3)
------------ ------------
Loss on ordinary activities before and after taxation (2,366) (6,848)
------------ ------------
Basic and diluted loss per share (5.44)p (16.96)p
Adjusted basic and diluted loss per share (0.90)p (12.18)p
Consolidated Balance Sheet
As at 31 December 2002
31 December 31 December
2002 2001
#000 #000
Fixed assets
Intangible assets 14,262 16,237
Tangible assets 170 312
Investments 160 210
------------ ------------
14,592 16,759
------------ ------------
Current assets
Debtors 641 728
Cash at bank and in hand 667 951
------------ ------------
1,308 1,679
------------ ------------
Creditors
Amounts falling due within one year (959) (1,466)
------------ ------------
Net current assets 349 213
------------ ------------
Total assets less current liabilities 14,941 16,972
Provisions for liabilities and charges (789) (525)
------------ ------------
14,152 16,447
------------ ------------
Capital and Reserves
Called up share capital 436 432
Share premium account 9,509 9,442
Share scheme reserve 4 19
Merger reserve (124) (124)
Other reserve 18,889 18,889
Profit and loss account (14,562) (12,211)
------------ ------------
Equity shareholders' funds 14,152 16,447
------------ ------------
Company Balance Sheet
As at 31 December 2002
31 December 31 December
2002 2001
#000 #000
Fixed assets
Tangible assets 22 20
Investments 472 597
------------ ------------
494 617
------------ ------------
Current assets
Debtors 9,922 9,072
Cash at bank and in hand 551 918
------------ ------------
10,473 9,990
------------ ------------
Creditors
Amounts falling due within one year (126) (304)
------------ ------------
Net current assets 10,347 9,686
------------ ------------
Total assets less current liabilities 10,841 10,303
Provisions for liabilities and charges (784) -
------------ ------------
10,057 10,303
Capital and Reserves ------------ ------------
Called up share capital 436 432
Share premium account 9,509 9,442
Share scheme reserve 4 19
Profit and loss account 108 410
------------ ------------
Equity shareholders' funds 10,057 10,303
------------ ------------
Consolidated Cash Flow Statement
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
#000 #000
Net cash outflow from operating activities (357) (3,885)
Returns on investments and servicing of finance
Interest received 19 65
Interest paid - (3)
Net cash inflow from returns on investments ------------ ------------
and servicing of finance 19 62
------------ ------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (67) (277)
Sale of tangible fixed assets - 35
Decrease/(Increase) in investment loans 50 (50)
------------ ------------
Net cash outflow from capital expenditure and
financial investments (17) (292)
------------ ------------
Net cash outflow before management
of liquid resources and financing (355) (4,115)
------------ ------------
Management of liquid resources
Decrease in short term bank deposits 364 1,837
------------ ------------
Net cash inflow from management of liquid resources 364 1,837
------------ ------------
Financing
Capital element of finance lease rental payments - (57)
Issue of ordinary share capital including premium
(net of expenses) - 2,027
Exercise of share options 71 18
------------ ------------
Net cash inflow from financing 71 1,988
------------ ------------
Increase/(decrease) in cash in the year 80 (291)
------------ ------------
Reconciliation of Net Cash Flow to Movement in Net Funds
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
#000 #000
Increase/(decrease) in cash in the year 80 (291)
Cash outflow from lease financing - 57
Cash outflow from management of liquid resources (364) (1,837)
------------ ------------
Movement in net funds (284) (2,071)
Opening net funds 951 3,022
------------ ------------
Closing net funds 667 951
------------ ------------
NOTE
The above financial information does not constitute statutory accounts as
defined by section 240 of the Companies Act 1985. It is an extract from the 2002
financial statements which have not yet been filed with the Registrar of
Companies. The Auditors' Report, dated 07 April 2003, on the financial
statements for the year ended 31 December 2002, which received an unqualified
opinion, does not contain a statement under section 237(2) or (3) of the
Companies Act 1985. The comparative information is an extract from the statutory
accounts for the financial year ended 31 December 2001. Those accounts, on which
the Auditors issued an unqualified opinion, which does not contain a statement
under either section 237(2) or (3) of the Companies Act 1985, have been filed
with the Registrar of Companies.
A copy of the full accounts will be sent to shareholders on the Register Of
Members as at 07 April 2003 or can be obtained from the Secretary, Auxinet plc,
Descartes House, 8 Gate Street, London WC2A 3HP
ANNUAL GENERAL MEETING
The Company's AGM will be held on Wednesday, 28 May 2003 at 12.00 noon at
Descartes House, 8 Gate Street, London WC2A 3HP
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